UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 12, 2017
EMISPHERE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE | 000-17758 | 13-3306985 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
4 Becker Farm Road Suite 103, Roseland, New Jersey |
07068 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 973-532-8000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition. |
On May 12, 2017, Emisphere Technologies, Inc. issued a press release announcing results of operations for the quarterly period ended March 31, 2017. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. |
Description | |
99.1 | Press Release of Emisphere Technologies, Inc., dated May 12, 2017 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Emisphere Technologies, Inc. | ||||||
May 12, 2017 |
By: | /s/ Alan L. Rubino | ||||
Name: | Alan L. Rubino | |||||
Title: | President & Chief Executive Officer |
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Exhibit Index
Exhibit No. |
Description | |
99.1 | Press release of Emisphere Technologies, Inc., dated May 12, 2017 |
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Exhibit 99.1
Emisphere Reports First Quarter 2017 Financial Results
The Company to Host Conference Call Today at 8:30 AM ET
ROSELAND, N.J., May 12, 2017 Emisphere Technologies, Inc. (OTCBB: EMIS) today reported financial results for the first quarter ended March 31, 2017, and how to access todays quarterly earnings call where the management team will overview recent progress against the Companys business plan.
FIRST QUARTER 2017 FINANCIAL RESULTS
Emisphere reported net income of $6.1 million, or $0.10 per basic share and $0.04 per diluted share for the quarter ended March 31, 2017, compared to a net loss of $1.8 million, or $0.03 per basic and diluted share for the same period last year.
An operating loss of $1.1 million was reported for the three months ended March 31, 2017, compared to an operating loss of $2.7 million in the same period last year. Total operating expenses include research and development costs of $0.01 million, general and administrative expenses of $1.2 million and selling expenses of $0.0 million compared to $0.1 million, $1.3 million and $1.6 million, respectively, for the same period last year.
The Company reported other non-operating income of $7.2 million for the three months ended March 31, 2017, compared to other non-operating income of $0.9 million for the same period last year, an increase of $6.3 million. The increase is due primarily to a $6.6 million increase in the change in fair value of derivative instruments offset by a $0.3 million increase in interest expense.
LIQUIDITY
As of March 31, 2017, Emisphere had approximately $4.6 million in cash, a net decrease of $1.4 million from December 31, 2016, approximately $1.4 million working capital deficiency, a stockholders deficit of approximately $155.3 million and an accumulated deficit of approximately $558.5 million.
Our net loss was $10.0 million, $40.4 million and $25.4 million for the years ended December 31, 2016, 2015 and 2014, respectively. Our net cash provided (outlays) from operations and capital expenditures were ($6.8), ($2.8) million and ($8.4) million for the years ended December 31, 2016, 2015 and 2014, respectively. Net cash provided (outlays) include receipts of deferred revenue of ($0.01) million, $14.6 million and $0.0 million for 2016, 2015, and 2014, respectively. Our stockholders deficit was $161.4 million and $151.9 million as of December 31, 2016 and 2015, respectively.
We have limited capital resources and operations to date have been funded with the proceeds from private and public debt and equity financings, collaborative research agreements and income earned on investments. As of March 31, 2017, our financial obligations included approximately $53.0 million (face value) under our Second Amended and Restated Convertible Notes (the Convertible Notes), approximately $26.2 million (face value) under a loan agreement entered into on August 20, 2014 (the Loan Agreement), approximately $0.8 million (face value) under our Second Amended and Restated Reimbursement Notes (the Reimbursement Notes), and approximately $2.4 million (face value) under our Second Amended and Restated Bridge Notes (the Bridge Notes).
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Management has concluded that due to the conditions described above, there is substantial doubt about the entitys ability to continue as a going concern through one year after the issuance of the accompanying financial statements. We have evaluated the significance of the conditions in relation to our ability to meet our obligations and believe that our current cash balance will provide sufficient capital to continue operations through approximately March 2018. While our plan is to raise capital from commercial operations and/or product partnering opportunities to address our capital deficiencies and meet our operating cash requirements, there is no assurance that our plans will be successful. If we fail to generate sufficient capital from commercial operations or partnerships, we will need to seek capital from other sources and risk default under the terms of our existing loans. We cannot assure you that financing will be available on favorable terms or at all. Additionally, if additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in dilution to our existing stockholders. Furthermore, despite our optimism regarding the Eligen ® Technology, even in the event that the Company is adequately funded, there is no guarantee that any of our products or product candidates will perform as hoped or that such products can be successfully commercialized.
CONFERENCE CALL AND WEBCAST INFORMATION
The live webcast of the conference call can be accessed through the Companys web site at www.emisphere.com. The call can also be accessed by dialing (877) 303-9483 (United States and Canada) or (760) 666-3584 (international), and entering Conference ID# 14929495. In addition, an archive of the webcast can be accessed through the same link and an audio replay of the call will be available beginning Friday, May 12, 2017 at 11:30 AM ET through 11:59 PM ET on May 19, 2017, by calling (855) 859-2056 (United States and Canada) or (404) 537-3406 (International), and entering Conference ID# 14929495.
ABOUT ELIGEN B12
Eligen B12 is indicated for the dietary management of patients who have a medically-diagnosed vitamin B12 deficiency, associated with a disease or condition that cannot be managed by a modification of the normal diet alone. Eligen B12 is designed so that patients only need to take a single oral tablet (cyanocobalamin 1000 mcg/salcaprozate sodium [SNAC] 100 mg) of B12 daily.
Eligen B12 is the first and only prescription medical food that has been shown to normalize vitamin B12 levels comparable to an intramuscular (IM) injection of B12. In a study that compared the impact of Eligen B12 and IM B12 on plasma B12 levels in 50 patients with demonstrated B12 deficiency (serum B12 <350 pg/mL), both products normalized B12 levels by Day 15 (first observation) and maintained normal levels over the duration of the study (three months). In a study that compared bioavailability in 20 healthy subjects of Eligen B12 with that of a standard oral B12 supplement, the bioavailability of Eligen B12 was 5.09 percent compared with 2.16 percent, which is more than double the bioavailability of the conventional over-the-counter oral B12 supplement formulation at the same dose.
Eligen B12 is classified by the U.S. Food and Drug Administration as a medical food. A medical food is a prescription product formulated to be consumed or administered orally under medical supervision for the treatment of a disease or condition that cannot be managed by a modification of the normal diet alone.
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For more information, visit www.eligenb12.com.
ELIGEN B12 IMPORTANT SAFETY INFORMATION
Those with an allergy to B12, cobalt or any ingredients of Eligen B12 should not take this product. Eligen B12 should not be taken by people who have Lebers disease, which physicians may refer to as hereditary optic nerve atrophy. Cyanocobalamin (B12) can lead to optic nerve damage (and possibly blindness) in people with Lebers disease. Note that Eligen B12 has not been studied in patients below 18 years of age.
ABOUT EMISPHERE
Emisphere is a pharmaceutical and drug delivery company. The Company launched its first prescription product, oral Eligen B12, in the U.S. in March 2015. Beyond Eligen B12, the Company utilizes its proprietary Eligen® Technology to develop new oral formulations of therapeutic agents. Emisphere is currently partnered with global pharmaceutical companies for the development of new orally delivered therapeutics. For more information, please visit www.emisphere.com.
SAFE HARBOR STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The statements in this release or oral statements made by representatives of Emisphere relating to matters that are not historical facts are forward-looking statements that involve risks and uncertainties, including, but not limited to, the sufficiency of the Companys cash position, the Companys ability to enter into strategic partnerships, the Companys ability to capture market share for oral Eligen B12 or any potential products, the success of the Companys commercialization initiatives, the ability if the Company and/or that of its partners to develop, manufacture and commercialize products using Emispheres drug delivery technology, and other risks and uncertainties detailed in Emispheres filings with the Securities and Exchange Commission, including those factors discussed under the caption Risk Factors identified in the documents Emisphere has filed, or will file, with the Securities and Exchange Commission (SEC). Copies of Emispheres filings with the SEC may be obtained from the SEC Internet site at http://www.sec.gov. Emisphere expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Emispheres expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based.
COMPANY CONTACTS:
Alan L. Rubino, CEO
973.532.8000
arubino@emisphere.com
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EMISPHERE TECHNOLOGIES INC.
CONDENSED BALANCE SHEETS
MARCH 31, 2017 AND DECEMBER 31, 2016
(in thousands, except share and per share data)
March 31, 2017 |
December 31, 2016 |
|||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 4,639 | $ | 6,085 | ||||
Accounts Receivable, net |
239 | 301 | ||||||
Inventories |
50 | 67 | ||||||
Prepaid expenses and other current assets |
230 | 107 | ||||||
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|
|
|
|||||
Total Current Assets |
5,158 | 6,560 | ||||||
Security deposits |
24 | 24 | ||||||
|
|
|
|
|||||
Total assets |
$ | 5,182 | $ | 6,584 | ||||
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|
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LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||||
Current liabilities |
||||||||
Accounts payable and accrued expenses |
$ | 789 | $ | 869 | ||||
Deferred Revenue, current portion |
194 | 513 | ||||||
Derivative instruments-related party |
5,595 | 8,343 | ||||||
|
|
|
|
|||||
Total current liabilities |
6,578 | 9,725 | ||||||
Notes payable, related party, net of related discount |
68,089 | 67,589 | ||||||
Accrued interest, related party |
2,682 | | ||||||
Derivative instruments related party |
27,474 | 34,851 | ||||||
Deferred revenue |
55,616 | 55,616 | ||||||
Royalty payable related party |
| 206 | ||||||
Deferred lease liability, and other liabilities |
2 | 5 | ||||||
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|
|
|
|||||
Total liabilities |
160,441 | 167,992 | ||||||
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|
|
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Commitments and Contingencies |
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Stockholders deficit: |
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Preferred stock, $.01 par value; 4,000,000 shares authorized; none-issued and outstanding |
| | ||||||
Common stock, $.01 par value; 400,000,000 shares authorized; issued 61,142,210 and 60,977,210 shares (60,852,478 and 60,687,478 outstanding) as of March 31, 2017 and December 31, 2016, respectively |
611 | 610 | ||||||
Additional paid-in-capital |
406,616 | 406,495 | ||||||
Subscription receivable |
(37 | ) | | |||||
Accumulated deficit |
(558,497 | ) | (564,561 | ) | ||||
Common stock held in treasury, at cost; 289,732 shares |
(3,952 | ) | (3,952 | ) | ||||
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|
|
|||||
Total stockholders deficit |
(155,259 | ) | (161,408 | ) | ||||
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|
|
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Total liabilities and stockholders deficit |
$ | 5,182 | $ | 6,584 | ||||
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EMISPHERE TECHNOLOGIES, INC.
CONDENSED STATEMENT OF OPERATIONS
For the three months ended March 31, 2017 and 2016
(in thousands, except share and per share data)
(unaudited)
For the Three Months Ended | ||||||||
March 31, | ||||||||
2017 | 2016 | |||||||
Net revenue |
$ | 222 | $ | 373 | ||||
Cost of goods sold |
47 | 52 | ||||||
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|
|
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Gross profit |
175 | 321 | ||||||
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Costs and expenses: |
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Research and development |
80 | 91 | ||||||
General and administrative expenses |
1,181 | 1,340 | ||||||
Selling expenses |
| 1,595 | ||||||
Depreciation and amortization |
| 4 | ||||||
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|
|
|
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Total costs and expenses |
1,261 | 3,030 | ||||||
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Operating loss |
(1,086 | ) | (2,709 | ) | ||||
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Other non-operating income (expense): |
||||||||
Other income |
2 | 5 | ||||||
Change in fair value of derivative instruments |
||||||||
Related party |
10,124 | 3,449 | ||||||
Other |
| 122 | ||||||
Interest expense, related party |
(2,976 | ) | (2,696 | ) | ||||
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|
|
|
|||||
Total other non-operating income (expense) |
7,150 | 880 | ||||||
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|
|
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Net income (loss) |
$ | 6,064 | $ | (1,829 | ) | |||
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Net income (loss) per share, basic |
$ | 0.10 | $ | (0.03 | ) | |||
Net income (loss) per share, diluted |
$ | 0.04 | $ | (0.03 | ) | |||
Weighted average shares outstanding, basic |
60,714,978 | 60,687,478 | ||||||
Weighted average shares outstanding, diluted |
69,134,441 | 60,687,478 |
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